the uncertainty principle

Quantum physics and logistics may not appear to have much in common, but both are ruled by the uncertainty principle. In physics, the uncertainty principle, developed by German scientist Werner Heisenberg, refers to the difficulty of determining both the position and momentum of a subatomic particle at the same time. The uncertainty principle in logistics, as I'm calling it, is not nearly so abstruse, yet it has powerful implications for economies and for individual businesses: That is, the longer and more complex the supply chain, the less able we are to determine with certainty its future reliability and the more certain we can be that disruptions will occur.

Shippers, carriers, third parties and researchers spend enormous amounts of time and energy attempting to develop reliable distribution networks, yet the best-laid plans are subject to forces and events beyond the control of even the most sophisticated systems. We need look no further than the havoc wrought by Hurricane Katrina for evidence of the potential fragility of supply chains. Weather, labor actions, new and more rigorous regulations, responses to security threats, and so many other variables can snarl the progress of shipments moving across town or across the world—and the farther the shipment must travel, the greater the risk.

For today's distribution managers, the issue is not whether something will go wrong, but what will go wrong, when it will go wrong, and how to respond when things do go awry. Planning a distribution network today entails not only laying out the best network, finding the best logistics partners, and developing, equipping, and staffing the right locations, but also having contingencies in place for when things go wrong. The difficulty is, of course, having contingencies ready without knowing just what those disruptions might be. The next hurricane, the next strike, the next fire in a supplier's plant, the next security disruption may be easy to anticipate in some broad way, but you never know the particulars until it happens.

How do you prepare, knowing that supply chain disruptions are inevitable but never knowing where? In this issue, we address that question, with a focus on transportation infrastructure. We look at the growing pressures and constraints on the transportation network that almost guarantee disruptions; we look at how one major retailer has tackled the issue; we publish the conclusions of a study about how a large swath of DC managers and executives have responded; and we suggest some approaches managers and executives can take to protect themselves and their companies against the inevitable.

We could all use some positive news and thankfully we have some for you: Many signs are showing that the freight markets are starting to recover.
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